Universal Display Corporation Announces First Quarter 2021 Financial Results

May 6, 2021

EWING, N.J.--(BUSINESS WIRE)-- Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today reported financial results for the first quarter ended March 31, 2021.

“As OLED momentum continues across the consumer electronics market, we are advancing our robust OLED materials and technology leadership,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display. “Since our last earnings call, we announced new extended OLED Technology License and Material Purchase Agreements with LG Display and Visionox. We also announced that along with PPG, we are jointly establishing a new manufacturing site in Shannon, Ireland, for the production of our highly efficient, high-performing UniversalPHOLED materials. Additionally, Universal Display Corporation was named to Financial Times’ The Americas’ Fastest-Growing Companies 2021 list.”

Rosenblatt continued, “Last month, we celebrated our twenty-fifth year as a Nasdaq-listed company by virtually ringing the opening bell. It was an incredible milestone that we shared with our employees, customers, partners, and all of our stakeholders. Since our inception, Universal Display Corporation has stood for ‘Vision, Innovation and Reality’ and we have invested approximately $700 million in research and development to advance our company from a start-up to a leading player in the global OLED ecosystem. We continue to broaden and deepen the breadth of our first-mover advantage to further enable our customers and the OLED industry.”

Financial Highlights for the First Quarter of 2021

  • Total revenue in the first quarter of 2021 was $134.0 million as compared to $112.3 million in the first quarter of 2020.
  • Revenue from material sales was $79.8 million in the first quarter of 2021 as compared to $66.6 million in the first quarter of 2020.
  • Revenue from royalty and license fees was $50.9 million in the first quarter of 2021 as compared to $43.1 million in the first quarter of 2020.
  • Cost of materials was $21.0 million in the first quarter of 2021 as compared to $20.2 million in the first quarter of 2020.
  • Operating income was $63.6 million in the first quarter of 2021 as compared to $44.5 million in the first quarter of 2020.
  • Net income was $51.7 million or $1.08 per diluted share in the first quarter of 2021 as compared to $38.2 million or $0.80 per diluted share in the first quarter of 2020.

Revenue Comparison

($ in thousands)

 

Three Months Ended March 31,

 

 

 

 

2021

 

 

2020

 

 

Material sales

 

$

79,808

 

 

$

66,575

 

 

Royalty and license fees

 

 

50,886

 

 

 

43,078

 

 

Contract research services

 

 

3,306

 

 

 

2,624

 

 

Total revenue

 

$

134,000

 

 

$

112,277

 

 

Cost of Materials Comparison

($ in thousands)

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Material sales

 

$

79,808

 

 

$

66,575

 

Cost of material sales

 

 

20,999

 

 

 

20,211

 

Gross margin on material sales

 

 

58,809

 

 

 

46,364

 

Gross margin as a % of material sales

 

 

74%

 

 

 

70%

 

2021 Guidance

The Company continues to believe that its 2021 revenue will be approximately in the range of $530 million to $560 million. The OLED industry remains at a stage where many variables can have a material impact on its growth, and the Company thus caveats its financial guidance accordingly.

Dividend

The Company also announced a second quarter cash dividend of $0.20 per share on the Company’s common stock. The dividend is payable on June 30, 2021 to all shareholders of record on June 15, 2021.

Conference Call Information

In conjunction with this release, Universal Display will host a conference call on May 6, 2021 at 5:00 p.m. Eastern Time. The live webcast of the conference call can be accessed under the events page of the Company's Investor Relations website at ir.oled.com. Those wishing to participate in the live call should dial 1-877-524-8416 (toll-free) or 1-412-902-1028. Please dial in 5-10 minutes prior to the scheduled conference call time. An online archive of the webcast will be available within two hours of the conclusion of the call.

About Universal Display Corporation

Universal Display Corporation (Nasdaq: OLED) is a leader in the research, development and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications. Founded in 1994 and with subsidiaries and offices around the world, the Company currently owns, exclusively licenses or has the sole right to sublicense more than 5,000 patents issued and pending worldwide. Universal Display licenses its proprietary technologies, including its breakthrough high-efficiency UniversalPHOLED® phosphorescent OLED technology that can enable the development of energy-efficient and eco-friendly displays and solid-state lighting. The Company also develops and offers high-quality, state-of-the-art UniversalPHOLED materials that are recognized as key ingredients in the fabrication of OLEDs with peak performance. In addition, Universal Display delivers innovative and customized solutions to its clients and partners through technology transfer, collaborative technology development and on-site training. To learn more about Universal Display Corporation, please visit https://oled.com/.

Universal Display Corporation and the Universal Display Corporation logo are trademarks or registered trademarks of Universal Display Corporation. All other company, brand or product names may be trademarks or registered trademarks.

All statements in this document that are not historical, such as those relating to the Company’s technologies and potential applications of those technologies, the Company’s expected results and future declaration of dividends, as well as the growth of the OLED market and the Company’s opportunities in that market, are forward-looking financial statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements in this document, as they reflect Universal Display Corporation’s current views with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. These risks and uncertainties are discussed in greater detail in Universal Display Corporation’s periodic reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, including, in particular, the section entitled “Risk Factors” in Universal Display Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document.

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UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)

 

 

March 31, 2021

 

 

December 31, 2020

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

726,279

 

 

$

630,012

 

Short-term investments

 

 

720

 

 

 

99,996

 

Accounts receivable

 

 

91,327

 

 

 

82,261

 

Inventory

 

 

101,422

 

 

 

91,591

 

Other current assets

 

 

39,587

 

 

 

20,746

 

Total current assets

 

 

959,335

 

 

 

924,606

 

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $76,756 and $72,493

 

 

107,815

 

 

 

102,113

 

ACQUIRED TECHNOLOGY, net of accumulated amortization of $158,197 and $153,050

 

 

65,106

 

 

 

70,253

 

OTHER INTANGIBLE ASSETS, net of accumulated amortization of $6,496 and $6,155

 

 

10,641

 

 

 

10,685

 

GOODWILL

 

 

15,535

 

 

 

15,535

 

INVESTMENTS

 

 

8,500

 

 

 

5,000

 

DEFERRED INCOME TAXES

 

 

36,864

 

 

 

37,695

 

OTHER ASSETS

 

 

106,704

 

 

 

103,341

 

TOTAL ASSETS

 

$

1,310,500

 

 

$

1,269,228

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

14,741

 

 

$

13,801

 

Accrued expenses

 

 

19,171

 

 

 

41,404

 

Deferred revenue

 

 

128,546

 

 

 

105,215

 

Other current liabilities

 

 

3,874

 

 

 

4,540

 

Total current liabilities

 

 

166,332

 

 

 

164,960

 

DEFERRED REVENUE

 

 

49,578

 

 

 

57,086

 

RETIREMENT PLAN BENEFIT LIABILITY

 

 

79,246

 

 

 

78,527

 

OTHER LIABILITIES

 

 

62,876

 

 

 

55,941

 

Total liabilities

 

 

358,032

 

 

 

356,514

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

Preferred Stock, par value $0.01 per share, 5,000,000 shares authorized, 200,000

shares of Series A Nonconvertible Preferred Stock issued and outstanding

(liquidation value of $7.50 per share or $1,500)

 

 

2

 

 

 

2

 

Common Stock, par value $0.01 per share, 200,000,000 shares authorized, 49,050,776

and 49,013,476 shares issued, and 47,685,128 and 47,647,828 shares outstanding, at

March 31, 2021 and December 31, 2020, respectively

 

 

491

 

 

 

490

 

Additional paid-in capital

 

 

632,138

 

 

 

635,595

 

Retained earnings

 

 

396,130

 

 

 

353,930

 

Accumulated other comprehensive loss

 

 

(35,009

)

 

 

(36,019

)

Treasury stock, at cost (1,365,648 shares at March 31, 2021 and December 31, 2020)

 

 

(41,284

)

 

 

(41,284

)

Total shareholders’ equity

 

 

952,468

 

 

 

912,714

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

1,310,500

 

 

$

1,269,228

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except share and per share data)

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

REVENUE:

 

 

 

 

 

 

 

 

Material sales

 

$

79,808

 

 

$

66,575

 

Royalty and license fees

 

 

50,886

 

 

 

43,078

 

Contract research services

 

 

3,306

 

 

 

2,624

 

Total revenue

 

 

134,000

 

 

 

112,277

 

COST OF SALES

 

 

23,298

 

 

 

22,459

 

Gross margin

 

 

110,702

 

 

 

89,818

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Research and development

 

 

23,305

 

 

 

19,497

 

Selling, general and administrative

 

 

16,404

 

 

 

15,403

 

Amortization of acquired technology and other intangible assets

 

 

5,488

 

 

 

5,490

 

Patent costs

 

 

1,835

 

 

 

1,638

 

Royalty and license expense

 

 

112

 

 

 

3,284

 

Total operating expenses

 

 

47,144

 

 

 

45,312

 

OPERATING INCOME

 

 

63,558

 

 

 

44,506

 

Interest income, net

 

 

133

 

 

 

2,147

 

Other income, net

 

 

59

 

 

 

202

 

Interest and other income, net

 

 

192

 

 

 

2,349

 

INCOME BEFORE INCOME TAXES

 

 

63,750

 

 

 

46,855

 

INCOME TAX EXPENSE

 

 

(12,063

)

 

 

(8,700

)

NET INCOME

 

$

51,687

 

 

$

38,155

 

NET INCOME PER COMMON SHARE:

 

 

 

 

 

 

 

 

BASIC

 

$

1.09

 

 

$

0.80

 

DILUTED

 

$

1.08

 

 

$

0.80

 

WEIGHTED AVERAGE SHARES USED IN COMPUTING NET

INCOME PER COMMON SHARE:

 

 

 

 

 

 

 

 

BASIC

 

 

47,267,921

 

 

 

47,093,033

 

DILUTED

 

 

47,329,704

 

 

 

47,122,829

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

 

$

0.20

 

 

$

0.15

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

51,687

 

 

$

38,155

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Amortization of deferred revenue and recognition of unbilled receivables

 

 

(57,648

)

 

 

(40,511

)

Depreciation

 

 

4,263

 

 

 

3,615

 

Amortization of intangibles

 

 

5,488

 

 

 

5,490

 

Change in excess inventory reserve

 

 

667

 

 

 

611

 

Amortization of premium and discount on investments, net

 

 

(70

)

 

 

(2,005

)

Stock-based compensation to employees

 

 

5,200

 

 

 

5,735

 

Stock-based compensation to Board of Directors and Scientific Advisory Board

 

 

330

 

 

 

254

 

Deferred income tax expense

 

 

515

 

 

 

940

 

Retirement plan expense

 

 

2,228

 

 

 

1,414

 

Decrease (increase) in assets:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(9,066

)

 

 

(22,140

)

Inventory

 

 

(10,498

)

 

 

(10,726

)

Other current assets

 

 

5,400

 

 

 

7,706

 

Other assets

 

 

(7,133

)

 

 

(3,245

)

Increase (decrease) in liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

(21,136

)

 

 

(29,340

)

Other current liabilities

 

 

(666

)

 

 

3,114

 

Deferred revenue

 

 

53,000

 

 

 

43,685

 

Other liabilities

 

 

6,935

 

 

 

2,994

 

Net cash provided by operating activities

 

 

29,496

 

 

 

5,746

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(9,938

)

 

 

(4,782

)

Purchases of intangibles

 

 

(298

)

 

 

 

Purchases of investments

 

 

(4,220

)

 

 

(148,592

)

Proceeds from sale and maturity of investments

 

 

100,000

 

 

 

250,400

 

Net cash provided by investing activities

 

 

85,544

 

 

 

97,026

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

348

 

 

 

259

 

Payment of withholding taxes related to stock-based compensation to employees

 

 

(9,634

)

 

 

(4,816

)

Cash dividends paid

 

 

(9,487

)

 

 

(7,098

)

Net cash used in financing activities

 

 

(18,773

)

 

 

(11,655

)

INCREASE IN CASH AND CASH EQUIVALENTS

 

 

96,267

 

 

 

91,117

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

630,012

 

 

 

131,627

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

726,279

 

 

$

222,744

 

The following non-cash activities occurred:

 

 

 

 

 

 

 

 

Unrealized (loss) gain on available-for-sale securities

 

$

(66

)

 

$

2,380

 

Common stock issued to Board of Directors and Scientific Advisory Board that was

earned and accrued for in a previous period

 

 

300

 

 

 

300

 

Net change in accounts payable and accrued expenses related to purchases of property

and equipment

 

 

(27

)

 

 

689

 

 

Universal Display:
Darice Liu
investor@oled.com
media@oled.com
+1 609-964-5123

Source: Universal Display Corporation